There is a radical change taking place in financial inclusivity in India. The Inclusive Finance Report 2023 states that for every 100 men who have a bank account or a formal financial account, there are 103 women with similar accounts. According to the report, the gender gap in loan access has significantly narrowed, which emphasises major progress made towards gender parity in access to financial services.
Positively, there has been a significant decrease in gender disparity in account ownership across banks, pension accounts and non-bank lending. In 2021, the disparity decreased to a negligible -0.3 per cent from 17 per cent in 2011. Financial tools have permeated society and class barriers, in addition to gender.
Access Gap To Financial Services Narrowed
The access gap has narrowed considerably for people who are not in the labour force, those without primary level education and those below the poverty line (40 per cent). In any formal financial system, the gap in inclusion between the richest (60 per cent) and most impoverished (40 per cent) of the population was 14 per cent in 2011, 15 per cent in 2014, 5 per cent in 2017, and -1 per cent in 2021.
The accessibility for women to receive credit has increased, but there is still much room for improvement. As per the report, women made up a mere 21 per cent of individual borrowers in the banking industry in 2014 whereas in March 2023, this percentage increased to 34 per cent.
Pradhan Mantri Jan Dhan Yojana Scheme
Even though there has been a slight change since the onset of COVID-19 in March 2020, these figures represent a major advancement in the direction of gender parity in financial access. As per the report, the Pradhan Mantri Jan Dhan Yojana’s (PMJDY) contribution to improving financial inclusion plays a huge role in making this change. It claims that PMJDY has fared better in India than earlier financial inclusion initiatives. One of the scheme’s main features is the Basic Savings Bank Deposit Account (BSBDA), which has no minimum balance requirement and allows for limitless credits and four withdrawals per month. Disparities still exist in the distribution of RuPay debit cards, which is necessary to avail the accident insurance under the scheme.
Less than 70 per cent of PMJDY account holders have received RuPay cards as of August 2023, which means that about 160 million people are still without accident insurance coverage. With issue rates of 75 per cent, 80 per cent, and 37 per cent, respectively, these cards vary in their penetration across public sector banks (PSB), private sector banks (PVB), and regional rural banks (RRB).
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